POLYCAB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.3
| Stock Code | POLYCAB | Market Cap | 1,22,109 Cr. | Current Price | 8,110 ₹ | High / Low | 8,724 ₹ |
| Stock P/E | 47.1 | Book Value | 697 ₹ | Dividend Yield | 0.43 % | ROCE | 29.7 % |
| ROE | 21.4 % | Face Value | 10.0 ₹ | DMA 50 | 7,696 ₹ | DMA 200 | 7,331 ₹ |
| Chg in FII Hold | 3.39 % | Chg in DII Hold | -3.18 % | PAT Qtr | 618 Cr. | PAT Prev Qtr | 675 Cr. |
| RSI | 59.1 | MACD | 185 | Volume | 4,23,460 | Avg Vol 1Wk | 3,49,919 |
| Low price | 5,446 ₹ | High price | 8,724 ₹ | PEG Ratio | 1.45 | Debt to equity | 0.01 |
| 52w Index | 81.3 % | Qtr Profit Var | 36.4 % | EPS | 172 ₹ | Industry PE | 24.5 |
📊 POLYCAB demonstrates strong fundamentals with high ROE (21.4%) and ROCE (29.7%), minimal debt (0.01), and consistent EPS growth (₹172). Cash flows remain healthy, supported by efficient capital utilization. However, its valuation is stretched with a P/E of 47.1 compared to the industry average of 24.5, reflecting premium pricing. The PEG ratio of 1.45 suggests growth is reasonably priced, but entry timing is critical.
💡 Ideal Entry Price Zone: ₹7,200 – ₹7,500 (near DMA 200 and valuation comfort).
⏳ Exit Strategy / Holding Period: Long-term investors can hold with a 3–5 year horizon. Partial profit booking is advisable near ₹8,700 (recent high), while monitoring ROE, ROCE, PEG ratio, and dividend yield for sustained growth.
✅ Positive
- Strong ROE (21.4%) and ROCE (29.7%) highlight efficient capital deployment.
- Debt-to-equity ratio of 0.01 ensures financial stability.
- EPS of ₹172 with consistent growth trend.
- FII holdings increased (+3.39%), showing institutional confidence.
- PEG ratio of 1.45 indicates growth is reasonably priced.
⚠️ Limitation
- High P/E (47.1) compared to industry average (24.5).
- Low dividend yield at 0.43%.
- Premium valuation limits near-term upside potential.
📉 Company Negative News
- Quarterly PAT declined (618 Cr vs 675 Cr).
- DII holdings reduced (-3.18%).
📈 Company Positive News
- Strong quarterly profit variation (+36.4%).
- Stock delivered 81.3% gain over the past year.
🏭 Industry
- Industry P/E: 24.5, highlighting POLYCAB’s premium valuation.
- Sector growth supported by infrastructure and housing demand.
🔎 Conclusion
POLYCAB is a fundamentally robust company with strong profitability and growth metrics. Long-term investors can hold confidently with a 3–5 year horizon. New entrants should wait for a correction to ₹7,200–₹7,500 for safer entry. Partial profit booking near ₹8,700 is advisable to manage risk while retaining exposure to long-term growth.